In essence, the new Wage Ladder still provides the same service, namely allowing brands and other stakeholders to plot the wages that workers in (garment) factories earn against existing wage benchmarks. So this means that someone checking the monthly wage records of a garment factory located in India can place the wage earned into a local context. By identifying the wage range of, for example, sewing workers at the factory, the Wage Ladder allows these figures to be compared to the local minimum wage, or the best practice wage in the region, and the living wage estimates applicable to that region.

What is a living wage?

By plotting the wages and comparing it to existing wage benchmarks, FWF breathed life into the rigor mortis of discussions around living wage when it launched the first Wage Ladder. Many discussions around this topic begin and end with the question: what is a living wage? The problem is that you can ask 100 people what a living wage is, and you will receive 100 different responses. FWF bypasses this discussion by identifying and incorporating living wage (and other) estimates into the benchmark without passing judgment on whether the estimates are actually living wage or not.

At FWF, all audit reports include a Wage Ladder chart, and our member brands can compare the wages at the factory to existing benchmarks. When this has been identified, member brands can initiate steps to increase wages by identifying target wages, essentially allowing workers at the factory to ‘climb the ladder’ to living wages.

Track progress in factories

Since the Wage Ladder has been launched, hundreds of wage ladder charts have been created, hundreds of benchmarks inputted, and thousands of wage levels at factories have been plotted. This is an incredible amount of valuable data that should be more effectively mined and analyzed. However, it was a challenge to structure this information in an effective way. For example, when a wage ladder was made for a second audit at a factory, there was no possibility to easily compare results with the first audit and track progress. The only way to do this was to manually identify all the existing wage ladders, export the information to a statistical program and make an analysis.

The new Wage Ladder changes all of this. Factories that have been audited previously by our auditors can now be selected. Department names within a factory, such as sewing workers or quality control, are also standardized. This lays the foundation for allowing us at FWF to track progress at factories and identify where wages have increased (or maybe decreased) over time. It also allows us to identify the range of what sewing workers in, for example, Bangladesh earned based on all the audits conducted in the first half of 2014.
In addition to these improvements in the Wage Ladder infrastructure, the graphics look more attractive and the functionality has been improved.

High Data Wage Ladder

But perhaps the most important change coming with the new Wage Ladder is the introduction of a brand new feature, the High Data Wage Ladder. This Wage Ladder does exactly as promised, it provides more data for analysis. In the first place, it allows auditors to quickly and easily upload wage information for a whole factory. FWF’s current audit procedure calls for auditors to identify and analyze the wages of a sample of the workers’ wages. This may not seem like a big deal for a factory in Macedonia with 50 people, but when you are auditing a factory located in China that provides employment to 3,000 people, we’re getting somewhere.

When the wage data is uploaded, a wage ladder is created that identifies the maximum, minimum and mode wages for each department within the factory. In addition to this, it also charts the income distribution within each department according to gender. In essence, this allows auditors to analyze whether or not male workers in the sewing department are earning more than their female colleagues. Again, this may not sound like much, but it is potentially a huge step forward in eliminating gender-based wage discrimination. Because if the High Data wage ladder shows that males are earning significantly more than females, FWF member brands can work with the factory to analyze and remediate this problem.

Climbing up the ladder

All these improvements are currently available to FWF and its member companies as all the extra information and analysis will be integrated into the audit reports of FWF. 

The new Wage Ladder still allows non-FWF brands and stakeholders though to complete their own wage ladders as guests in the public version of the renewed Wage Ladder. The tool is currently being used by over 500 companies, in both the garment and other sectors, worldwide

The Wage Ladder is a first step to bridge the gap between minimum wages and living wages. It’s not a solution in itself; millions of garment workers worldwide will not be paid a living wage tomorrow as a result of this tool. But the Wage Ladder makes clear that the industry does not need to wait for an international standard to be developed. You can start moving wages ‘up the ladder’ today.

The international organisation Fair Wear Foundation (FWF) works together with garment brands to improve conditions in garment factories. Once a brand becomes a member, it’s committed to implement FWF’s eight labour standards. FWF verifies how well each member is doing and publicly reports about their performance on the website www.fairwear.org. 

Learn more about the tool and various wage benchmarks in the Wage Ladder Q&A and read the FWF report Climbing the Ladder to Living Wages to learn more about FWF’s approach to Living Wages.